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How Long Will This Bull Trap Last


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HOLA441
Now that's what I needed. I'm getting fed up of hearing talk of green shoots when the fundamentals haven't changed - lack of available and affordable credit still not there, manufacturing output down, consumer spending flatlining (despite record levels of discounting), Unemployment rising (still) and set to rise further...I could throw in the cost of oil and more importantly the price at the pumps rising, the price of food rising. All this sucks money from the average family, and it is only when the average family, on the average wage can afford to buy the average house (in their area) that things will return to any sense of normality.

I'm a truck driver, I am in the Front Line of the Economy and I can tell you we are getting laid off in droves every day of the week.

If you don't buy it, we don't deliver it. Still, at least it gets those smelly trucks off the road ;)

I say one thing, Sibley, Rinoa, Valerius and Hamish say another.

Your choice.

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HOLA442
I'm with you, I give it 3 to 4 months then it's back to a continuing .......what do estate agents call it?........."correction". LOL
I agree. However the fall will look less steep on the graph.

I have a little maths explanation for that.

SKIP THIS PARA IF MATHS BORES YOU!!!

The falls, the rises also, tend to be in percentage terms of the present price, rather than in absolute terms. That can explain the flattening curve shape when falling and the zooming up shape when rising. Like an exponential fall or rise.

Sorry. Have you fallen asleep?

:)

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HOLA443
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HOLA445
As the title says really?

How long will the Bull Trap last????

How long until crash speed once again?

We could always look at the last UK housing crash or the one before.Oh, except they didn't have a "Bull Trap".

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HOLA446

yeah i am now seeing my employer starting to strugle and we have been ok so far.

sad really.

all this green shoots crap is just prolonging the pain.

i think i am an average chap on an average wage and i have a 15K deposit saved up and for all its worth its F all with the current average at 154-158.

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HOLA4410
We could always look at the last UK housing crash or the one before.Oh, except they didn't have a "Bull Trap".

Nationwide figures showed 3 months of rising prices through April / May / June in 1991.

Now look back at the home page and ask yourself if 1991 was the bottom.

IMHO that was the bull trap.

P.S. Add exactly 18 years to that ;)

Edited by libspero
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HOLA4414
Nationwide figures showed 3 months of rising prices through April / May / June in 1991.

Now look back at the home page and ask yourself if 1991 was the bottom.

IMHO that was the bull trap.

P.S. Add exactly 18 years to that ;)

And then adjust for inflation...

Trouble is you can't have it both ways. Adjusted for inflation it isn't a "bull trap", not adjusted for inflation, prices didn't fall very far or very fast after that.

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HOLA4415
And then adjust for inflation...

Trouble is you can't have it both ways. Adjusted for inflation it isn't a "bull trap", not adjusted for inflation, prices didn't fall very far or very fast after that.

Prices went up for three months. No debate there I fancy.

If you choose to consider 1991 the bottom of the previous crash then that is fine, we will just agree to differ.. but if I were you I would be praying to the gods of high inflation.

(I could do with a decent pay rise ;) )

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HOLA4416
The ONLY way to reinflate houses is to print money and give it directly to public sector.

This would lead to disaster within weeks. - its pretty much what Mugabe did.

If this happens bulls - you are not in a better position than anyone else.

You are still made of meat like the rest of us

At the minute QE is for the bankers only, but if it does leak out into public sector wages Brown would achieve what Mugabe did for Zimbabwe.

Hyperinflation is just as destructive as deflation. There are no ideal outcomes.

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HOLA4417
Prices went up for three months. No debate there I fancy.

If you choose to consider 1991 the bottom of the previous crash then that is fine, we will just agree to differ.. but if I were you I would be praying to the gods of high inflation.

(I could do with a decent pay rise ;) )

I'm saying IF you use actual prices they did rise in 1991 BUT THEN the bottom was not very far after and not much below that level.

IF you use inflation adjusted figures THEN there was no "bull trap" BUT the bottom was much later.

You can't use actual prices to show a bull trap then point to an inflation adjusted graph to show a lower further bottom.

You choose which ONE chart to use. You can't bolt different charts together.

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HOLA4418

The frustrating thing is, in a way, this is a bull trap.

It is only a temporary rise, and it will revert to more (but much smaller) falls over next winter.

But what the bears fail to realise is that not all bull traps occur close to the top. Some occur close to the bottom. Not so much a bull trap, but rather a premature recovery.... ;) It would be just as appropriate to call the coming falls over winter a bear trap.

The point being, that the stereotypical "lifecycle of a bubble" chart was designed more for highly liquid equities or commodities bubbles. It has no precedent in UK housing, even in previous bubbles.

Whilst it is illustrative in terms of phase, it is entirely innacurate in terms of timing and scale.

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HOLA4419
I'm saying IF you use actual prices they did rise in 1991 BUT THEN the bottom was not very far after and not much below that level.

IF you use inflation adjusted figures THEN there was no "bull trap" BUT the bottom was much later.

You can't use actual prices to show a bull trap then point to an inflation adjusted graph to show a lower further bottom.

You choose which ONE chart to use. You can't bolt different charts together.

I understood perfectly (although I disagree on two levels).

Firstly, people understand things in nominal terms, not real.. therefore a bull trap could have the same psychological effect even in an inflationary environment where it would appear flat on an inflation adjusted graph.

Secondly, you are assuming that we will have a high inflation environment again which would give the same real/nominal falls as the last crash.

Although I am not saying that you will necessarily be wrong, you are making a fairly big assumption. (Hence my point, I look forward to a good pay rise this year ;) )

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HOLA4420
Fek knows, but my missus is putting her foot down and we are gonna be doing some vieiwings..... so hopefully it will get a shift on cos if I offer on somethin and it gets accepted, I will then re-neg day before exchange... failing that i will end up over paying.

That all said if I do end up buying I am gonna stop watching the news and not log on to HPC again, this will prevent me feeling a little psd

Well I am glad I didn't sell to you!!! I don't agree with either party re-negotiating that late in the process. It is a stressful enough process anyway without that cr@p. Why not just negotiate the price you think is right at the beginning.

Edited by BecksMyCat
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HOLA4421
As the title says really?

How long will the Bull Trap last????

How long until crash speed once again?

About 3 months, at a guess.

These Halifax and Nationwide House Price Indices are based on Mortgage Applications, and are adjusted for Seasonal Variations, see below.

So you can correctly conclude that there has been more mortgage money allocated to House Purchase in the recent months in question, and these have been seasonally adjusted. In view of the talk of Green Shoots everywhere, this is hardly surprising.

However, this does not alter the underlying problem, namely that:

1. Unemployment is rising.

2. Houses are too expensive, both for FTB's and BTL's, who supported the last boom.

3. House price multiples of income are still way above the historic 3.5.

4. First time buyers cannot afford a house.

5. The banks are basically bankrupt.

6. Mortgages cannot now be packaged and sold off.

7. Markets virtually never fall in a straight line, which is why forcasting is so difficult.

8. According to Elliot Wave Analysis, a classical Bear Market is a typical 1,2,3 Wave, with Wave 2 in a bear market as a bear market rally. I believe we are now seeing wave 2 in the stock market, and the housing market.

9. If I am correct about Wave 2, the next Wave 3 will be a massive crash.

10. Warning: Elliot Wave analysis is extremely difficult, in allocating exact waves ( sadly) so please do not put to much credence on the Elliot Wave analysis!

IMO the long term trend is down, with a short term rally in house prices.

The Land Registry Index, which is the only index that tracks actual sold prices, is still DOWN!

Best wishes, HB

Halifax/Nationwide

The methodology: The Halifax and Nationwide indices are two of the most widely quoted in the press. For both indices, figures are based on a monthly sample of mortgage applications. From these purchases a standardised house price is reached, and seasonal factors are applied.

The downside: Only tracking homes bought with a mortgage ignores a significant chunk of the market - properties bought with cash.

Land Registry

The methodology: The Land Registry arguably has the easiest job in tracking the property market as it has evidence almost all sales made. It then averages all sale prices and compares them with the previous month. It also uses the Repeat Sales Regression method to ensure properties are compared like-for-like.

The downside: While the Land Registry has the largest sample size, and covers nearly all sales in the UK, its data lags behind other indices as it takes time to compile. Also, not even the Land Registry can record every sale made.

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HOLA4424
As the title says really?

How long will the Bull Trap last????

How long until crash speed once again?

Until the money runs out.

Up till 2007, the money was easy credit, financed by securitisation. Now the money driving the market is cash.

Now, what is the ratio of deposits to credit?

(Sorry, I haven't read the rest of the thread yet).

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HOLA4425

OK, I've read the rest of the thread now:

I was talking to an EA at the weekend, basically said the pickup in sales noted for Feb-April has gone dead again. What you have seen is a tiny bit of pent-up demand resulting in an apparent spring bounce. We had some unseasonal nice weather in February if you remember and this got people out and about.

The volume of sales in Feb and April was still only about 30% of the same time last year. Given also that prices have gone down I bet the poor old EA's are having to scrape by on less than one-quarter of their previous incomes.

Certainly come Autumn I bet we are in crash mode again.

If this is true, it is far more important than any index.

EA anecdotal have called the boom, the bust, the 2008/09 bottom and 2009 bounce for me. I'll have to see if any of them are still talking to me.

Oh, what part of the country are you in?

We could always look at the last UK housing crash or the one before.Oh, except they didn't have a "Bull Trap".

The last one did. Volume died in 88, but the big falls came after spring 1991.

No link, people I know were on the front line. ;)

The frustrating thing is, in a way, this is a bull trap.

It is only a temporary rise, and it will revert to more (but much smaller) falls over next winter.

But what the bears fail to realise is that not all bull traps occur close to the top. Some occur close to the bottom. Not so much a bull trap, but rather a premature recovery.... ;) It would be just as appropriate to call the coming falls over winter a bear trap.

The point being, that the stereotypical "lifecycle of a bubble" chart was designed more for highly liquid equities or commodities bubbles. It has no precedent in UK housing, even in previous bubbles.

Whilst it is illustrative in terms of phase, it is entirely innacurate in terms of timing and scale.

A sensible post.

I too think that we are closer to the bottom than the top.

(Not saying I agree 100% though).

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